City workers in Paternoster Square, where the headquarters of the London Stock Exchange is based, in the City of London, UK, on Thursday, March 2, 2023.
Bloomberg | Bloomberg | Getty Images
LONDON — The U.K. economy grew by 0.3% in January, official figures showed on Friday, exceeding expectations as it continues to fend off what economists see as an inevitable recession.
Economists polled by Reuters had projected a 0.1% monthly increase in GDP. GDP was flat over the three months to the end of January, the Office for National Statistics said.
“The services sector grew by 0.5% in January 2023, after falling by 0.8% in December 2022, with the largest contributions to growth in January 2023 coming from education, transport and storage, human health activities, and arts, entertainment and recreation activities, all of which have rebounded after falls in December 2022,” the ONS found.
Production output fell by 0.3% in January after growing 0.3% in December, while the construction sector dropped 1.7% in January after flatlining the previous month.
The U.K. economy showed no growth in the final quarter of 2022 to narrowly avoid a recession — commonly defined as two quarters of negative growth — but shrunk by 0.5% in December.
Both the Bank of England and the Office for Budget Responsibility have forecast a five-quarter recession beginning in the first quarter of 2023, but the data has so far exceeded expectations.
The U.K. remains the only country in the G-7 (Group of Seven) major economies that has yet to fully recover its lost output during the Covid-19 pandemic. The ONS said Friday that monthly GDP is now estimated to be 0.2% below its pre-pandemic levels.
(With Inputs from cnbc)
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